Blockchain technology has the potential to transform both our financial system and our trading business, and to improve the human situation. A growing number of unbanked citizens, both overseas and here in the United States, can now quickly, cheaply, and anonymously send and receive money from loved ones, repressive regimes and governments, and unstable economies when needed. Traditional financial systems that were long unavailable in underserved communities in various parts of Africa, Asia, and Latin America now need to realize the power and efficiency of blockchain.
Turn on… is a monthly opinion columnist for Marc Powers who has spent most of his 40-year legal career handling complex securities cases in the United States after joining the SEC. He is currently an adjunct professor at Florida International University College of Law, teaching a course on Blockchain, Cryptocurrency and Regulatory Considerations.
In less than two years, decentralized financing or DeFi came into being. These communities can borrow and exchange money for their business activities or personal expenses in minutes. DeFi has get a raise from an ecosystem of less than $ 1 billion in early 2020 to an ecosystem of over $ 250 Billions locked up Worth today. The interest in unusable tokens or NFTs is just as explosive. These collectibles and other forms of NFT had sales of more than $ 10 billion for the third quarter, up from $ 1.2 billion six months earlier.
It is important that these blockchain use cases have legal and regulatory aspects. In particular, the US Securities and Exchange Commission has made it clear that most forms of tokens should be viewed as “security” and are therefore subject to both the jurisdiction of the SEC and the regulatory framework of US securities laws.
In a recent article in International journal on blockchain law, The SEC’s newest commissioner, Caroline Crenshaw, takes note:
“Many of DeFi’s services and products are similar to those found in traditional financial markets. […] Market participants who raise capital from investors or offer investors regulated services or functions often enter into regulatory obligations.”
In other words, certain aspects of DeFi may be subject to the authority of several federal agencies, including the Department of Justice, the Financial Crimes Enforcement Network, the Internal Revenue Service, the Commodity Exchange Commission, and the Federal Bureau of Investigation. In the NFT space there are undoubtedly various intellectual property rights, such as copyright and trademark laws, as well as possible securities laws.
The need for technically trained lawyers
There is clearly a growing need for lawyers at home and abroad to understand the possible legal issues and legal systems. It is clear that the best lawyers are, or should be, those who can advise their clients from a deep understanding of the business their clients are in. To advise clients entering the DeFi space, wouldn’t you want a tech-savvy attorney to understand blockchain and the legal issues that come with it? And maybe someone with more education or experience in finance or accounting than someone who studied philosophy or chemistry? Given the increased use of NFTs, should your attorney delve into the proposed NFT-related IPR and Art Laws Act?
I believe lawyers should, and that’s one of the reasons I currently teach both blockchain law and fintech law at the Florida International School of Law in Miami after several years in law firms and the SEC am. As companies build or expand their use of digital assets, they need guidance on the “rules of the road” as I believe most entrepreneurs want to do the right thing and want to abide by the laws that are in place. To do this, they can turn to the next generation of lawyers – currently law students – for answers or at least precise guidance. What is surprising, however, is that only about two dozen of the 200+ law schools in the United States have a class just for blockchain or just financial technology when I last checked. That’s only 10% of all law schools! That has to change, and quickly.
Earlier this year, I wrote a column about my concerns and those of others about China’s efforts digital yuan Replacing the US dollar as the world’s reserve currency, said the US must swiftly embrace the idea of a central bank digital currency (CBDC) and its development. The same applies to our new legal team. We need to educate them about new technologies and use cases of blockchain, artificial intelligence, data analysis and virtual and augmented reality, among other things. This will help them better represent their customers. The last great technology was the World Wide Web, which dominated the US in its development – but that was 25 to 30 years ago. U.S. leadership and dominance doesn’t come with blockchain technology. Lawyers can help advance this goal by having a good understanding of both the technology and the laws that affect them, and by helping shape or reshape the laws that should and should apply to them.
The intersection of technology and US law
Let’s briefly consider two legal cases that show how NFT activity found its way into the spheres of US law. In a lawsuit filed in Los Angeles federal court on November 16, Miramax is suing director Quentin Tarantinowho has worked on various films for breach of contract, copyright and trademark infringement, and unfair competition. Tarantino is reportedly preparing the sale of seven previously unreleased, unused scenes. before Junk literature Film script December Miramax claims this violates its rights to the film in various partnership agreements, and Tarantino clearly believes these proposed NFTs are being sold on the “rights reserved” terms in its contract with Miramax. A cease and desist letter from Miramax to Tarantino seems to have been ignored by him. It will be interesting to see what happens to it over the next month.
In a lawsuit Submit In May, Dapper Labs – the developer of the Stream blockchain and who works with the National Basketball Association to sell NBA Prime Shot Moments – was sued in the New York State Supreme Court in a class action lawsuit. At the heart of the complaint is that the tokens in the Move blockchain that power and brand the NFTs are “security”. At the center of the lawsuit is the NBA Major Shot “Marketplace” itself, on whose website these “moments” can be bought and sold. It is therefore alleged that the token sale and exchange, which involves the sale of unregistered securities, is in violation of Section 12 (a) (1) of the Securities Act of 1933. Specifically, the procedure The law is filed in the state, not the state. , the court and the NBA were not named in the lawsuit. This can be explained by the fact that the NBA is not an “issuer” of securities and that the plaintiff’s attorney prefers state courts where a judge may be inclined to continue the process and not impose sanctions on it.
These cases illustrate my point of view that it is important for a lawyer to understand these technologies and their legal implications. So let’s start training our future lawyers for the future and the future now!
Marc Powers He is currently an adjunct professor at Florida International University School of Law, where he teaches Blockchain, Cryptocurrency, and Regulatory Considerations and Fintech Law. He recently completed his internship at Am Law 100, where he built both the nationwide securities dispute and enforcement team and the hedge fund industry. Marc began his legal career in the SEC’s Enforcement Division. In his 40 years as an attorney, he has served on corporate representations such as the Bernie Madoff Ponzi program, a recent presidential pardon, and the insider trading litigation against Martha Stewart.
Views expressed are those of the author alone and do not necessarily reflect the views of Cointelegraph or Florida International University College of Law or its affiliates. This article is for general informational purposes only, is not intended and should not be viewed as investment or legal advice.